CITIES like Liverpool will see a trend away from new-build offices and more towards refurbishment, according to a new study.

Research by GVA Grimley shows that a shortage of bank finance and demand from potential occupiers for shorter leases has brought speculative, new-build development “almost to a standstill”.

Last week’s Liverpool Commercial Office Market Review revealed that, in 2009, available Grade A space in the city fell from 222,000 sq ft to 178,000 sq ft.

Building work has begun on the next phase of St Paul’s Square, but that is only happening thanks to more than £8m of public money.

Despite concern expressed by agents in Liverpool about the lack of Grade A accommodation, there is little prospect of a significant amount of new space coming through any time soon.

The GVA report says that, as developers and landlords seek a more feasible approach to deliver office stock, conditions have pushed the need to consider refurbishment further up the agenda.

Simon Reynolds, director and head of offices at the firm, said: “We are already beginning to see a shortage of Grade A office space in some markets.

“With development finance expected to be in short supply for an extended period, refurbishment needs to be a far greater consideration for landlords.

“Lease terms are becoming shorter and more flexible as landlords seek short-term assurances and occupiers will not commit to long-term leases.

“This will lead to an increase in the tenant turnover rate.

“Add to this the increasing demands of the Government and occupiers, particularly with regard to energy efficiency and sustainability.”